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Rhodes keeps people in mind

Detroit Emergency Manager Kevyn Orr filed the long-anticipated plan of adjustment with U.S. Bankruptcy Judge Steven Rhodes on Friday. But that plan is hardly a done deal.

While the goal is to create a pre-packaged bankruptcy, in which all the creditors have agreed to the plan and signed off before it ever hits a judge's desk, nobody expected that to be the case in the largest municipal bankruptcy in the country's history. Especially not when things like pensions are at stake.

So now negotiations continue while Rhodes reviews the proposal and sets the timeline. That's a lot of pressure on Rhodes, who is essentially setting precedents in a part of the law that is murky at best.

"If there's one thing certain about the plan ... it's going to change many things very substantially," the city's primary bankruptcy attorney, Bruce Bennett, who works for Jones Day, said in court last Wednesday.

And Rhodes has proven to be attentive to the human element of the bankruptcy, not just making the city's more than 100,000 creditors whole. He regularly invokes the pensioners and the fate of the city's 700,000 residents when questioning attorney's arguments.

Last week, he took an attorney to task, saying, "Every dollar (the city) spends on you, it's a dollar less for a police officer."

That attention to the impact on people, not just bondholders or bankers, is to be expected from Rhodes, said David Tawil, who was a student of Rhodes' at the University of Michigan law school.

"He is an extremely thoughtful and thorough and understanding man," said Tawil, who is a former bankruptcy attorney who founded New York City-based Maglan Capital LP, a hedge fund oriented on distressed assets. "He's an absolute gentleman."

Tawil pointed out a commonality that he has seen in most of Rhodes' cases: a desire to move things along expeditiously.

"He never wants the professionals to go ahead and tick the clock for the sake of generating fees," he said

Tawil has been surprised by a few of his former professor's rulings. Primarily, he was stunned to see Rhodes reject a deal the city made to settle a costly pension-debt deal — a deal that was negotiated by the case's lead mediator, Gerald Rosen, chief judge for the U.S. District Court for the Eastern District of Michigan.

"To be publicly lambasted for negotiating at all is a very strange thing," he said.

Still, Tawil expects Rhodes to fight for the average citizen first and foremost. And if that means rejecting a deal that a fellow judge endorsed, so be it.

After all, how Detroit emerges from bankruptcy will be Rhodes' legacy. He won't want just a body of law to refer to; he's a man who will want to see the city become a thriving, viable metropolis.